This is a big deal.
No more 6% stuff. Will drop between 25%-50%.
Dark Brandon?
No more 6% stuff. Will drop between 25%-50%.
Dark Brandon?
Realtor's commissions just dropped...
- Thread starter MitchLL
- Start date
You sure you want to credit Biden for this?
4 Ways a Settlement Could Change the Housing Industry
1. Home prices will drop.
2. The 6 percent commission will cease to be the norm.
3. Steering — the practice of agents directing buyers to more expensive houses — will be less common.
4. About one million real estate agents could leave the profession.
4 Ways a Settlement Could Change the Housing Industry
1. Home prices will drop.
2. The 6 percent commission will cease to be the norm.
3. Steering — the practice of agents directing buyers to more expensive houses — will be less common.
4. About one million real estate agents could leave the profession.
I've long viewed real estate agents as being the Ticketmaster of home sales. Taking disproportionate compensation compared to the little (if any) value they provide to the desired buy/sell transaction.
I have no problem with the selling price of my house dropping by 3% if that means that I'm not paying 6% to real estate brokers.
Scenario #1: House sells for $500,000 with agent(s) taking 6% ($30,000). Net to seller: $470,000.
Scenario #2: House sells for $485,000 (3% less than above) with agent(s) taking 3% ($14,500). Net to seller: $470,450.
$450 more to the seller and $15,500 less to agent(s) who didn't do squat to scrape 6% off the top of a real estate sale.
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This is crazy. The buyer's agent commission is built into the offer for the home. If buyers suddenly have to pay their Realtor's fee in cash, the first time home buyer market will come to a screeching halt. This just killed the market. Dead.
False. It just saved buyers a shit ton.
Why couldn’t this be incorporated into the loan like all the other transaction fees?
Well all of us here live in million dollar homes. That might change.
The market for white luxury vehicles is about to dry up.
I’m not sure if it will save anyone much of everything. A good realtor is worth their weight in gold. They can navigate you through a lot of otherwise expensive problems.
There are far too many hacks in the industry that don’t earn their share of the commissions. Maybe some of them will go away. Most of them leave the industry fairly quickly as is.
You know what would actually impact the cost of homes? More supply
This. We sold our home over Thanksgiving weekend the day it went on the market and bought our new home $100K below asking. Neither would have happened without our realtor. Would gladly pay the same commission again.
Nothing about the ruling changes what realtors are able to charge, only changes their ability to access MLS.
Realtors are unnecessary middlemen for the most to part. Should evolve solutions for the problems they handle that cost a fraction of what they do. Antiquated mode of operation.
Well . . . those "good" realtors can continue to charge for the value that they claim to bring to the transaction. Then market forces can determine whether those "good" realtors are, indeed, worth what they are currently charging.
Most fees aren't financed into the loan, they're cash at closing. The only fees added to the loan are government loan fees, like FHA or VA. Or for a refinance, they can usually get rolled in. But with purchases, when someone has 3% down, for example, there's no room to add more because they're already maxing out the loan-to-value.
If dark Brandon is behind this then I guess I'll be reverse pivoting back to Orange Man...
I assume most buyers do almost all of the legwork now on identifying houses to visit via Zillow, etc. and on good neighborhoods / schools via the internet. If I’m buying a house, I don’t think an agent is worth the 3% baked into the sales price. I’d rather pay a house inspector $100/showing to walk through houses with me than a realtor. At least I’d get some value out of it then.
If you have a crappy home, yes a realtor helps. If your home sells the second a realtor put it on the market, they didn't earn crap. Why should anyone be entitled to 6% of your houses value?
The problem is that realtors were able to artificially adjust the market to their benefit. Work well in times of low mortgage rates... not so much now.
The problem is that realtors were able to artificially adjust the market to their benefit. Work well in times of low mortgage rates... not so much now.
Yes, we had one great realtor when buying our first house. We found her at an open house that our current realtor didn't bring us to. We had been looking at houses for a month with no luck. Ran into this lady and she found us what we were looking for the day before it went on the market.
Every other realtor we've had was not worth their commission. We found all the houses we wanted to see and let her know. She unlocked the doors for us.
Exactly. What do most people think is a better situation:
A) House sells for $500k, realtors get $30k, seller nets $470k.
B) House sells for $500k, admin/legal take $5k, $25k is spent on repairs and updates, seller nets $470k.
Even if the seller netted the same amount, seems like option B would be preferred by everyone except real estate agents. If I’m a seller, I’d rather the buyer be happy with updates vs. money going to an agent.
Let's not pretend that realtors don't do anything - they certainly do. The buying/selling process would be a mess if negotiations were handled between two emotionally-driven parties. A good realtor ensures that the house/condo/property/whatever is well-pictured and described online. I don't think life is easy for a buyer's agent when you've got unrealistic buyers.
If I told you the things our realtor did for us, you wouldn't believe it. He even brought his kids to help clean our old home when we had to make an unexpectedly quick departure.
There's nothing forcing a buyer's agent to take on unrealistic buyers as clients.
I’m not a RE Agent, ( used to be in the 70’s) but the 6% fee was really not the “norm” in most places anymore. It’s been negotiable for a pretty long while now. And if your agent brings you an offer below your list price you can definitely ask them to “take a haircut” in cutting their commission.
In fact the usual has been the more expensive the house the more likely it is that the commission is more like 4.5 or 5. My sister is a Realtor and she says in fact the 6% is pretty much a dinosaur with home prices escalating so much.
Some listing agreements will present the seller with a sliding fee based on standard listing features or additional advertising efforts by the Realtor such as inclusion in luxury marketing publications or a video tour online, staging assistance, the number of open houses, etc.
Different laws in different states can make it more complicated and add fees that other states don’t mandate. Some states still require that an attorney has to oversee contracts and closings. That adds to the cost to buy/sell. Thank the legal lobby. Some just recommend title insurance (those companies are most always owned by…attorneys!)
We moved nine times for corporate transfers. If we hadn’t had a good real estate agent helping us navigate good school districts and neighborhoods where there were other families and youth sports, etc. it wouldn’t have been as smooth a transition in any case.
Realtors have lots of competition now too from those companies that bombard you with “we want to buy your house in any shape no worries”. I’d say the majority of homes in my HOA have in fact sold to these companies in the last two or three years. Most of my neighbors are older and either have very little left on a mortgage or they own their house outright and the equity in the house means a big check to them at closing. No hassle no for sale sign or Realtor to deal with. Buyer flips the house and lists directly or they pay a broker a flat fee. And it’s not 6% either.
As a lender, I'm really not excited to deal with a bunch of unrepresented internet "experts."
Every situation is different, obviously.
But I only use my personal experience in my comments.
Sold our last home and moved and bought a new built in 2018. My agent didn't do enough work for me to pay him $18k. And I don't think the agent earned 24k when we bought.
JMO.
But I only use my personal experience in my comments.
Sold our last home and moved and bought a new built in 2018. My agent didn't do enough work for me to pay him $18k. And I don't think the agent earned 24k when we bought.
JMO.
I recognize that there are some good ones out there. But the market is glutted with people that got in to get on the gravy train who do little more than add you to the MLS or drive you to homes you tell them that you want to see.
A realtors value is definitely in relation to the market. When there is a down market, they will often bust their ass and work really hard to help you sell your house. It has been that way in the past and it will again in the future.
In today’s market, they’re basically useless. I can’t tell you how many people I know have sold their house for above asking to people who only saw it online, or walked-through it very briefly and aren’t asking for an inspection, etc.
I understand that the realtors help put things online that will sell the house. But I also understand that is maybe a couple hours of work that they put in. Definitely not worth tens of thousands of dollars.
In today’s market, they’re basically useless. I can’t tell you how many people I know have sold their house for above asking to people who only saw it online, or walked-through it very briefly and aren’t asking for an inspection, etc.
I understand that the realtors help put things online that will sell the house. But I also understand that is maybe a couple hours of work that they put in. Definitely not worth tens of thousands of dollars.
That's kind of what I'm hearing as the day goes on. That this won't change much, just add more disclosures.
If you can ask for cash at closing from the Seller to replace carpet, refinish floors, re-painting, appliances, etc., you can certainly ask for cash to cover the costs of a buyer's agent.
You can't though. Not on a fixed rate loan. You can ask the seller to repair those things prior to closing, but you can't ask for cash at closing.
This is why you need a Realtor.
The home buying process has continued in its current antiquated form, while virtually every other type of commerce has become substantially more user friendly.
Why?
The real estate industry exists to serve itself first and foremost.
Why?
The real estate industry exists to serve itself first and foremost.
Anyone that agreed to 6% was an idiot. I negotiated mine down when I sold my former home
The last time I sold a home, we paid a lawyer less than $1K to do the contract and paid a few hundred for an inspection conducted by someone chosen by the buyer. The idea that someone else should have "earned" more than a couple thousand, let alone $20K or more, for that amount of work is ludicrous.
